However, I see this as a vertical integration and bringing more capabilities in house to make more money instead of hiring an outsider firm. 

Quote from @Cari Sweet:  This sounds like a case for Fair Housing- Familial Status discrimination. 

The December 2024 report from the Austin Board of REALTORS® (ABoR) shows stable housing prices and balanced market conditions in the Austin metro as we reached year’s end.

Or paying off my debt, while I provide them with a nice house to live in instead of an apartment. 

You can't just walk into the tenant's house to do your laundry.

Incorporating a washer-dryer hookup in the main house could be advantageous.This addition not only increases the convenience for potential renters but also adds value to the property itself.

The taxes here are high, but the price to rent ratio is exceptional and there is a huge demand for quality housing in certain neighborhoods.   

House was built in 2005 (I lived in this house and rented it out when I moved back to California). 

In fact, I’d like to turn the primary into a rental and then house hack in a multi-unit.

Then you own the LLC and can transfer the property into it.If you transfer the property into that LLC the way it is then technically you just gave your friend ownership of the house proportional to his ownership of the LLC.I'm not an attorney, so take that with a grain of salt.